The shuttering underscores Spain’s dire film market. It also tells a larger story, however, of the decade-or-more decline of the upscale movie business across much of Europe for everyone but the biggest-name auteur titles. Two of the culprits are piracy and TV.

Alta was a big pic buyer of U.S. and U.K. fare. Its current 45-pic slate of buys include “The Artist,” Wes Anderson’s “Moonrise Kingdom,” Paul Thomas Anderson’s “The Master” and Steve McQueen’s “Shame.”

Spain is an extreme case of the piracy problem. According to a recent study, 43 out of 100 Internet users admit to pirating copyrighted works.

And on the TV side, Spanish pubcaster RTVE has not acquired any Alta Classics movies in the past 2½ years, said Alta head of acquisitions Enrique Gonzalez-Kuhn.

Spain is an extreme case of this more general malaise. In Italy, pubcaster RAI signaled before the American Film Market that it was freezing acquisitions on foreign films to focus on Italian series and movies.

German pubcasters ARD and ZDF have pulled back on buying overseas arthouse titles for their major movie slots, alleging temporary budgetary restraints.

In 2012, RTVE’s state funding plunged 36.5% to $1.2 billion.

“In tough times, when public funding is stretched, public broadcasters will focus on what their audiences are most likely to want, which is usually local product,” said David Hancock, at IHS Screen Digest.

According to Rentrak, first-quarter box office in Spain was $175.5 million, down 2.7% from a very weak 2012, which itself was an 18.5% drop from 2011. Only two movies this year, “Django Unchained” and “The Croods,” made more than Euros 10 million ($13 million), according to box office analyst Pau Brunet.

Beyond piracy, Spain has been hit by 27% unemployment and a drastic 8%-to-21% rise in cinema ticket taxes last September. As a result, Spain has slipped out of the top ten markets in the world, falling to 13th in 2012 with a $803.15 total box office, behind Italy and now Mexico and Brazil.

“Today’s government in Spain does not want to realize that by fighting piracy and supporting its cultural industries it can generate far more income than by increasing VAT to 21%, since 21% of a dead body doesn’t get you too far,” said Juan Gordon, a producer at Morena Films. “We’ve been saying for months that this kind of thing was going to happen. This is just the beginning.”

Alta Films was founded in 1969. Gonzalez Kuhn said Alta Films was also hit hard by the costs of digitization at a time of falling market returns.

“It’s possible a significant number of cinemas will have to close in Spain because they simply don’t have the resources to digitize before the end of 35mm as a distribution format,” Hancock said.

Alta Classics parent company Alta Films in 1982 opened the five-plex Renoir just off Madrid’s Plaza de Espana, and built up the biggest arthouse circuit in Spain. At its height it reached just under 200 screens. It will now scale back to four Madrid cinema theaters, accounting for 29 screens, and maybe venues in Guadalajara and Tenerife.

UM… Bad reporting, guys…this story is incorrect. Alta is not “closing it’s doors”; Enrique Gonzalez Macho is downsizing his company drastically with the idea that closure is imminent. But it’s not closed YET… Fact check your stories better, please; we rely on Variety for ACCURATE news/info…